The Bush recovery has been good for Wall Street, but not Main Street. The economic
recovery that began in 2001 has brought slow job growth, limited wage gains, and
continued rising inequality. While families at the top of the income ladder have
seen their incomes rise faster than inflation, those in the middle and bottom
have seen theirs fall.
Millions now work in what we call "bad jobs." While higher-wage workers
take for granted that their jobs come with employer-based benefits like health
insurance, a retirement plan, and maybe some paid time off, just over one-in-five
workers (22.1 percent) are in a bad job -- a job that pays low wages and provides
That's where government work supports -- programs that ensure that families
can access basics such as healthcare, childcare, food, and housing -- are supposed
step in and fill in the gaps.
The reality, however, according to research we released this week, is that
nearly 41 million people live in families that don't earn enough to make ends
meet, and government benefits do not fill in the gap. These families work, but
their earnings aren't enough. Most low-wage workers don't get the kinds of employer-sponsored
benefits common for higher-waged workers, so without government help, these
families are left out in the cold, often unable to afford health insurance,
decent child care or other necessities.
We do have work supports to help people. Child-care assistance, the Earned
Income Tax Credit (EITC), food stamps, public housing and Section 8 housing
programs, Medicaid, the State Children's Health Insurance Program (SCHIP), and
Temporary Assistance to Needy Families are all available across the United States.
When families get these work supports, they help bridge the gaps left by low
wages and lack of employer-sponsored benefits. Across nine states (Illinois,
Iowa, Massachusetts, Minnesota, New York, North Carolina, Ohio, Texas, and Washington)
and the District of Columbia, for example, work supports close nearly half (44
percent) of the gap between a family's earnings and what it takes to make ends
But these policies leave out just as many as they help. Most of these work
supports were initially intended to serve poor, unemployed families. The eligibility
criteria require families to be very poor, earning so little in most states
that many of those who are in need still earn "too much" to be eligible.
The EITC and SCHIP were both designed to help working families, but even these
programs leave many families out in the cold.
After decades of little or no growth in earnings for millions of workers, and
with employers simultaneously paring back benefits, too many working-class families
are being left out in the cold, without access to employer-sponsored benefits
or government work-supports.
For nearly a century, the goal of U.S. social policy has focused on aiding
the poor, while leaving workers -- regardless of their earnings -- to access
benefits from their employer or the private sector. When a significant share
of the labor force was in a union and economic growth was providing widespread
income gains, this strategy might have made sense. But as employers pull back
from their historic role as benefit providers, we need to refocus our attention
on how to ensure that working families can make ends meet.
The U.S. work-support system was not set up to solve this problem and, as a
result, does not reach most working families. Our research found that across
ten states, just under half of people (46.9 percent) living in working families
with income below that necessary to purchase a basic standard of living are
eligible for Medicaid or SCHIP. Similarly, just over half (55.4 percent) are
eligible for the EITC.
Many of those eligible do not actually receive benefits. Across the ten states
we studied, about a quarter of children meeting the eligibility requirements
for childcare actually received any child-care subsidy. The programs that reached
the most people -- the EITC -- was the one that is fully funded and has the
easiest application process.
It's not just the very poor who need our attention. As members of the middle
class have been squeezed, more and more of us are struggling to maintain our
standard of living. The past 30 years have brought rising wage and income inequality
and an increase in low-wage, no-benefit jobs. If we want to see an economy that
works for everyone, then we -- and our representatives in Washington -- must
work for labor standards that support all workers.